Market wrap: concerns that corporate tax cuts would be significantly delayed - Westpac

Ross J Burland FXStreet

Analysts at Westpac offered a market wrap.

Key Quotes:

"Global market sentiment: US equities fell amid concerns that corporate tax cuts would be significantly delayed. The S&P500 is down 0.9%, and US bond yields and the US dollar are also lower.

Interest rates: US 10yr treasury yields initially rose to 2.35%, but fell to 2.31% following reports that tax cuts could be delayed until 2019. 2yr yields initially rose to 1.66% - a fresh high since Oct 2008 – before retreating to 1.63%. Fed fund futures yields continued to price the chance of a December rate hike at 97%.

Currencies: The US dollar index is down 0.4% on the day. EUR rose from 1.1600 to 1.1655. Safe-havens yen and Swiss franc outperformed, USD/JPY falling from 114.00 to 113.09. AUD was hurt by the decline in equities, falling from 0.7694 to 0.7650 but partly recovering to 0.7680. The NZD was the day’s underperformer, despite the small hawkish surprise delivered by the RBNZ earlier, falling from 0.6980 to 0.6934. AUD/NZD ranged sideways between 1.1020 and 1.1050, preserving a 70 pip fall post-RBNZ."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD remains offered below 1.3600

GBP/USD resumes its decline, reversing Tuesday’s bullish attempt and breaking below 1.3600 the figure on Wednesday. Cable’s marked pullback follows a firm advance in the Greenback as investors continue to assess latest US data as well as the geopolitical landscape.

EUR/USD bounces off lows, retests 1.1650

EUR/USD now manages to regain some balance, trimming earlier losses and reclaiming the mid-1.1600s in the latter part of Wednesday’s NA session. The pair’s retracement comes on the back of a solid performance of the US Dollar, as market participants gear up for upcoming key US data releases and Chair Warsh’s speech at the Jackson Hole Symposium.

Gold puts $4,600 to the test amid USD gains

Gold now faces some renewed downside pressure and seems to challenge the key $4,600 mark per troy ounce on Wednesday. That said, the yellow metal’s correction comes after three daily upticks in a row, fading at the same time the recent move to fresh tops around $4,700. The stronger US Dollar and a decent rebound in US Treasury yields across the curve continue to weigh on bullion.

Bitcoin recovery stalls near $80,000 as ETF inflows mount, whale demand strengthens

Bitcoin price is trading in the green on Wednesday, holding above $78,000 while struggling to extend its recovery above the $80,000 mark. Institutional demand is strengthening, with steady inflows and BlackRock’s tax-deferred Bitcoin-to-ETF swap volume reaching $5 billion.

Nvidia: How will the company perform as its switches from a chip maker to an AI finance house?

The main event for markets this week takes place this evening, after US markets close. Nvidia, the AI giant, will report results for last quarter. Another monster report is expected. Revenues could come in above $92bn, and earnings per share could come in at $2.09.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.